Agent fees--getting more than you pay for.
My agent recently started a firestorm of debate, both on Twitter and in the blogosphere, by starting a discussion about agent fees and no-advance publishing contracts. She asked, without endorsing the ideas, "How would the publishing industry change if agents switched from commission-based payment to billable hours?" and "How would the publishing industry change if ALL publishers went to a no-advance model?” You can follow the debate here: Colleen Lindsay--The Swivet
As far as agent fees goes, I think a step up from the current agent commission of 15% to 20% is perfectly reasonable, considering the amount of responsibility shifted onto agents by publishing houses (which are increasing workloads while laying off editors at a horrendous rate). An hourly, billable rate would be a disaster, not only because the accounting/paperwork/legalities for all parties involved would be a nightmare, but also because there's no way for a client to verify productive hours spent, and no way to quantify what productive hours are. And no writer could ever afford the hours invested by a good agent in preparing a manuscript.
Case in point: my agent has already done an exhaustive reading of my ms, spending a multitude of unpaid hours scrutinizing the text. She meticulously analyzed the plot, character development, narrative strength, voice, flow, motivations, story arc, continuity, effectiveness of the climax--the list goes on and on. After giving me reams of feedback in email and phone conferences, I spent months rewriting the ms. Now she will have to suffer through another grueling read, compare the drafts, find new errors (including overwriting and infodumps), and suggest further refinements. After I get this feedback, it will go through yet another polish/reading and one-on-one discussion before the ms. is sent out to a single editor. And all these hours, all this scrutiny, comes with no guarantee of a financial return, from a writer (me) with no track record. Then comes networking and pitching the ms. based on my agent’s knowledge of what editors have bought, are interested in acquiring, and their personal tastes and prejudices, followed by contract negotiations, publicity, and career strategy.
I think few writers realize that when an agent is part of an agency (similar to a real estate agent working for a broker), a fat percentage of their percentage goes to the house, to pay for the office space, resources and a legal team, which makes sure any contracts I enter are in my best interest, and provides guidance for copyright and foreign rights legalities. In the end, it's astonishing most agents aren't starving.
And yes, there are bad agents, who fail to meet obligations (as sadly, in the past, I learned from experience), but if you're not satisfied with the job your agent is doing (or, God forbid, she’s not satisfied with you), there's a severance clause in your contract. It's your obligation as a writer to take responsibility for your career. A good agent loves books (very few get rich) and the sum of you is greater than the parts.
As far as what I think needs to happen in the proto-e-book age, competitive pricing of the finished book is a crucial factor. The price for adult cloth novels now runs anywhere from $25-$28. Unless you're a best-selling author, and your book is discounted 30-40% (these discounts, btw, are what has inflated the price point), physical sales at full price will continue to shrink, hurting new writers most, and continuing the trend of the shrinking mid-list . If publishers reduced initial net and list prices, I think it would go a long way in generating sales, for the many book buyers who still love physical, tangible books. All of us have seen books from major publishing houses, that are sold at a lower retail price-point to introduce new writers, usually at $19.99 to $21.99, and these books still are generating profit. This strategy has worked very well for the music industry, and generates a fan base for newer artists. The lower price could be offset by smaller initial print runs, with successive reprints based on trending sales (in the digital age this is much less cost-prohibitive, and would allow tighter control of taxable inventory), caps on mega-advances by publishers (which in most cases, can't possibly ever earn out), by implementing two-tier prices to Amazon and brick-and-mortars based on whether or not the book is returnable, and by giving better discounts/co-ops for non-returnable titles. Several publishers already are experimenting with this. Selling at a loss (loss-leaders) to drive sales (Amazon, anyone?) must be aggressively fought on a united front by all publishing houses.
Just my two cents. Feel free to join the discussion.